Daily Outlook - ‘Risk On’ Markets, Stocks Up and Dollar Down

By @ibtimes on

U.S. Dollar Trading (USD) with stock markets being well supported on dips and risk sentiment remaining strong the Dollar was on the back foot for most of the day. FOMC Minutes showed some improvement on the economic growth outlook but concerns still remain on unemployment. In US stocks, DJIA +61 points closing at 12288, S&P +8 points closing at 1328 and NASDAQ +21 points closing at 2825. Looking ahead, Weekly Jobless Claims are forecast at 400k vs. 383k previously.  

The Euro (EUR) was able to rally after solid support was found under 1.3500 on talk of sovereign buying. EUR/JPY pushed above Y113 and is well position for more gains as the USD/JPY builds strength. Overall the EUR/USD traded with a low of 1.3461 and a high of 1.3590 before closing the day around 1.3560 in the New York session. Looking ahead, December Current Account forecast at -4bn vs. -11bn previously.

The Japanese Yen (JPY) retested Y84 but failed at the level and pulled back on the USD selling in other pairs. Crosses though were well supported except for GBP/JPY which suffered from some weak fundamental news. Overall the USD/JPY traded with a low of 83.48 and a high of 83.99 before closing the day around 83.65 in the New York session.

The Sterling (GBP) some soft jobs data hurt the pound with +2.4k vs. -3k forecast. The BOE quarterly inflation report disappointed those traders looking for more support for a rate rise this year. Overall the GBP/USD traded with a low of 1.5985 and a high of 1.6189 before closing the day at 1.6090 in the New York session. Looking ahead, February CBI orders are forecast at -14 vs. -16 previously.

The Australian Dollar (AUD) did well in the pro risk environment with gold and oil both rallying and helping push the Aussie back above 1.0000. The recent 0.99-1.01 range is continuing to hold with the market comfortable at the levels for now. Overall the AUD/USD traded with a low of 0.9964 and a high of 1.0058 before closing the day at 1.0040 in the New York session.

Oil & Gold (XAU) found support at $1370 and pushed to $1380 as the uptrend resumed. Overall trading with a low of USD$1367 and high of USD $1382 before ending the New York session at USD$1375 an ounce. Oil pushed higher on bullish Weekly US Oil inventory data. WTI Oil Closed +$0.67 at $84.99 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.3396

1.3428

1.3570

1.3621

1.3736

USD/JPY

82.87

83.10

83.55

84.21

84.69

GBP/USD

1.5964

1.5982

1.6095

1.6186

1.6279

AUD/USD

0.9897

0.9944

1.0035

1.0075

1.0137

XAU/USD

1348.00

1359

1375

1379

1393

OIL/USD

82.50

84.00

85.30

86.50

88.00

Euro - 1.3570

Initial support at 1.3428 (Feb 14 low) followed by 1.3396 (Jan 20 low). Initial resistance is now located at 1.3621 (Feb 11 high) followed by 1.3736 (Feb 10 High)

Yen - 83.55

Initial support is located at 83.10 (Feb 14 low) followed by 82.87 (38.2% retrace of 80.22-84.51). Initial resistance is now at 84.21 (Dec 17 high) followed by 84.69 (50% retrace of 89.16-80.22).

Pound - 1.6095

Initial support at 1.5982 (Feb 14 low) followed by 1.5964 (Feb 11 low). Initial resistance is now at 1.6186 (Feb 7 high) followed by 1.6279 (Feb 3 High).

Australian Dollar - 1.0035

Initial support at 0.9944 (Feb 15 low) followed by the 0.9897 (76.4% retrace of 0.9804-1.02). Initial resistance is now at 1.0075 (Feb 14 high) followed by 1.0137 (Feb 10 high).

Gold - 1375

Initial support at 1359 (Feb 8 low) followed by 1348 (Feb 7 low). Initial resistance is now at 1379 (61.8% retrace of 1424.05-1308.25) followed by 1393 (Jan 13 high).

Oil - 85.30

Initial support at 84.00 (Intraday Support) followed by 82.50 (Intraday Support). Initial resistance is now at 86.50 (Intraday Resistance) followed by 88.00 (Intraday Resistance).

Written by Anthony Darvall

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